Balaji Rao Vs. Commissioner of Income Tax, Madras. - Court Judgment

LegalCrystal Citation

legalcrystal.com/813012

Subject

Direct Taxation

Court

Chennai

Decided On

Dec-05-1934

Reported in

[1935]3ITR461(Mad)

Appellant

Balaji Rao

Respondent

Commissioner of Income Tax, Madras.

Excerpt:o.p.no. 207 of 1933 - .....the sum of rs. 11,781 paid as gratuity by the bank its provident and gratuity fund rules is income assessable to tax under sub-section (1) of section 7 of the act.'the facts of the case are sufficiently plain from the question framed. it is contended before us on behalf of the assessee that, at this gratuity was paid by the bank to him after his retirement, it is not assessable to income tax under section 7(1). this is an argument which we are quite unable to follow. we are invited to draw a distinction between gratuity paid to an employee during his employment and that paid to a former employee after the period of his employment has come to an end. there is no warrant whatever in the act for drawing any such distinction. a gratuity is definitely made assessable to income tax.....

Judgment:

.

The question referred to us is :- 'Whether the sum of Rs. 11,781 paid as gratuity by the bank its provident and Gratuity Fund Rules is income assessable to tax under sub-section (1) of Section 7 of the Act.'

The facts of the case are sufficiently plain from the question framed. It is contended before us on behalf of the assessee that, at this gratuity was paid by the bank to him after his retirement, it is not assessable to income tax under Section 7(1). This is an argument which we are quite unable to follow. We are invited to draw a distinction between gratuity paid to an employee during his employment and that paid to a former employee after the period of his employment has come to an end. There is no warrant whatever in the Act for drawing any such distinction. A gratuity is definitely made assessable to income tax under Section 7(1) of the Act under the head 'Salaries' and we see nothing whatever to support or warrant the argument presented to us that it is to be limited in the way in which we are invited to limit it. The answer to the question propounded must, therefore, be in the affirmative. Rs. 250 costs to the Commissioner of Income Tax.